Robin was recently featured on More Than a Few Words, a podcast run by entrepreneur and former corporate executive Lorraine Ball for marketing conversationalists and business owners. In this episode, Robin shares his advice on raising business prices and eliminating fear when it comes to comparing yourself to your competitors.
What to Avoid When Deciding Your Prices
Creating a decent pricing strategy for your business can be difficult, particularly when there is a lot of contradictory information out there on what you should and should not do. Here are Robin’s top three tips on pricing your business:
Do Not Base Your Prices Off Competitors
Competitor research can be incredibly insightful for helping your businesses brand and marketing strategies. Overall, they serve as great case studies for entrepreneurial journeys and social media campaigns. However, according to Robin, where most businesses go wrong is when they base their prices on competitor brands.
Think of competitor pricing as a rabbit hole; where did your competitor get their prices from? More than likely, it’s based on their main competitors and so forth. This leads to an oversaturated market of similar pricing points. Which, if you are looking to raise your businesses prices or least at make it stand out against competitors, goes against the whole principle. With competitor pricing, you cannot guarantee that they have fully researched it themselves, so it is better to formulate your own pricing strategy.
Medium to Low Pricing
All pricing points have their advantages. By selling your business cheaper, it can encourage more people to buy into your product/service simply because a good bargain is too hard to miss. But it can bring just as many disadvantages:
Economic Costs – By lowering your prices, you leave little room for personal income after business costs. If you proceed to go down this route, ensure you have a profit-first mentality where you delegate your income before other outgoings.
Quality of Product / Service – It is all about first impressions. If you price your service cheaply, it can imply that your service is not as good as the more expensive brands.
Quality of Client / Customer – When you price your services cheaply, it can attract the wrong type of client. Clients, when using cheaper services, often dismiss or disrespect the service you provide and are more likely to mess you around, which costs time and money. Raising your prices eliminates this, as it shows that the client is completely invested in your product.
Although it can be intimidating, charging more for your product/service can be the most beneficial pricing strategy for your business. As outlined on the podcast and in his book Take Your Shot, what business owners need to remember is that you will still attract clients even if your service is more costly. This will come with multiple benefits such as higher quality clients, more money to spend on resources, staff and marketing, and creates a better first impression for your business.
Ultimately, a successful pricing strategy goes hand in hand with how you sell your business. Robin recommends not basing your business strategy on the practices of others but rather “what is the most economically viable for your business”.Unsure of where to go next with sales and marketing? The More Than a Few Words podcast is a great place to start. Tune in and subscribe to Lorraine every week for specialist advice and conversations surrounding business, marketing, mindset and strategy.